DiscoverScalable Real Estate Investing
Scalable Real Estate Investing
Claim Ownership

Scalable Real Estate Investing

Author: Mason Klement

Subscribed: 3Played: 35
Share

Description

Are you new to real estate investing or have existing investments but want to learn the best ways to scale and maximize your passive income? Join Mason as he speaks with a variety of experienced real estate professionals ranging from multifamily syndicators to passive investors and more. You can also access free resources and learn more by going to https://masonklement.com/
34 Episodes
Reverse
Brian Spear is a Founder of Sunrise Capital Investors. His company specializes in acquiring deals in off-market, direct-to-owner transactions in the unique niche of mobile home parks.  Over the past decade, Brian has raised tens of millions of dollars and has helped hundreds of accredited investors diversify into mobile home parks. As co-host of the Mobile Home Park Investing podcast, Brian also educates investors on how to locate, negotiate, and acquire properties that generate cash flow and build legacy wealth for their families. He has been featured in numerous media outlets and is an official member of the Forbes real estate council.  Brian attended the University of Kentucky on a baseball scholarship and was voted captain of a team that ultimately had six MLB alums. He was also named CoSlDA ESPN the Magazine Academic All-District.Episode Highlights:- Many institutional investors are forced to sell properties because of maturing debt or because they’re in the process of winding down a fund. Mom and pop operators on the other hand, usually have no motivation to sell within a clear timeline since the main motivator is to retire someday.- Leveraging brokers that have been plugged into a community for many years and that is not an industry specialist can be a very valuable asset to leverage in finding deals. Brokers also save you a lot of the leg work required to find deals yourself.- Although Sunrise Capital relies on brokers to bring in many deals, about 85% of their total deals are sourced using direct-to-owner marketing.- The natural progression of a real estate investor to reach capital fundraising status is to start with your own capital, raise money from friends and family, grow your investor network through word of mouth referrals, and eventually raise capital through SEC regulated syndications such as Reg D 506(c) offerings. It took Sunrise Capital at least 4 years to reach this point.- Sunrise Capital differs from other real estate investment firms in that they usually return capital to their investors through refinancings instead of asset sales, which mitigates investors’ reinvestment risk and maximizes the longevity of each investment.Helpful Links:www.sunrisecapitalinvestors.comBest Way to Contact Brian:sunrisecapitalinvestors.com/freereportInvestwithsunrise.com
Corey is a Husband, Father, and God believer 7-figure Wholesaler and fix and flipper. He’s also an e-commerce and oil and gas investor and helps real estate entrepreneurs live the life they desire. Currently, his wholesaling business generates more than $250,000 in revenue.Episode Highlights:- Creating a great team culture, work environment, and understanding your employees' long-term goals are essential to mitigating flight risk.- Always look at your team members as partners, not employees.- PPC is something you should gradually ease into starting at $1,500 per month- Don’t completely stop your initial local marketing because that pays the bills. The key is to gradually shift the allocation of marketing dollars from the initial marketing channels and geography to a national PPC-focused one.- Novations are key to being able to sell in any market, but especially smaller, less active markets.Helpful Links:https://trurealty.com/staff-member/corey-geary/https://newagewholesaling.com/Best Way to Contact Corey:https://www.facebook.com/corey.geary.7
Today we have Mark Owens who was able to quit his day job in the early 2000s leveraging his rental portfolio which eventually grew to over 100 units including some mod-sized apartment buildings. He has also wholesaled about 200 deals. Mark Owens began his investment career in 2002 in Baltimore, Maryland. At that time he was a Microsoft Certified Trainer teaching upper level computer classes in colleges all over Maryland. Within a few short years he was able to leave the job and focus on growing his rental portfolio. Since then he has acquired over 100 rental units including some mid-size apartment buildings, wholesaled close to 200 deals and done a few retail flips. Mark has figured out a way to run his business around his life- not the other way around. He spends much of his free time coaching, speaking, hiking, scuba diving, and flying planes.Episode Highlights:- Buy rentals and build your passive income. As soon as the market slows down the first people to suffer are wholesalers because deal flow will stop. - Whenever the economy enters a recession Mark has been able to raise rents and benefit as people in Class A neighborhoods move to Class B and B moves to C and C wants to stay in C, creating more demand for Class C properties.- Don’t live beyond your means. If your real estate business hits a rough patch and income dries up for a little while, you need to have capital to weather that period. The first people that go out of business are the ones that did not defer gratification, and spend all excess cash on doo-dads like jet skis and expensive cars.- Always set up your business so that you can work from the beach using a cell phone and laptop. Do this by putting together a boots-on-the-ground team of contractors to manage your properties.- The most important key to succeeding in any real estate business is to build a strong network and solid reputation. Without one or the other, you won’t get very far.Helpful Links:https://markowens.com/https://www.facebook.com/groups/420244028368348/Best Way to Contact Mark:mark@markowens.com
Nick is the Owner/Founder/Executive Chairman of Want To Sell Now, the largest nationwide wholesaling company in the United States based out of Austin TX. He also owns a fleet of semi-trucks, multiple eCommerce businesses and invests in multiple companies and commercial real estate. Last, he’s the founder and owner of the 7 Figure Cartel mastermind that gets people quickly through the hurdles to become multiple 7 figure real estate investors. Episode Highlights:- Always keep your acquisitions team and dispositions teams separate. Don’t have one person doing both.- There are certain synergies realized when working in-person in a local office.- Always screen prospective employees using Tony Robbins DISC test, the Hexaco test, some practical, real world trials, and multiple rounds of interviews.- Whenever hiring high caliber people, to mitigate flight risk, never put them in a box or apply a ceiling to how much they can earn. - When it comes to online PPC marketing, Google and Bing are significantly higher converting than social media platforms such as Facebook or Instagram.- To quickly get up to speed in any market for single family properties, first look at for sale listings on Zillow and analyze total saves and total days on market. Then do direct comps using Propstream.- The key to breaking through your plateau in your business is having the right team in place, using the right digital marketing, and going nationwide.Helpful Links:https://7figurecartel.mykajabi.com/Best Way to Contact Nick:@Nickperryrei on Instagram
Alicia is a passionate and driven global real estate investor based out of Australia,conducting deals in the USA. She co-owns multiple businesses including Global CitizensHoldings Inc., Landscouts, Supercharged Offers and WILDA for Women in Business. Focused on leadership in business and investing in land, her business ventures provide efficient real estate marketing and world-class data solutions, which assists other real estate investors to digitally transform their business for increased results.Helpful Links:https://superchargedoffers.com/https://superchargedoffers.com/credit-key/https://freshworkscrm.grsm.io/aliciajarrett6259Ways to Contact Alicia:alicia@superchargedoffers.com888-538-5478Episode Highlights:- Use a CRM like Hivemind or Freshworks to automate your pipeline and task management.- Develop quantified, crystal clear KPIs before delegating the workflow to a VA.- If running VAs on a part time schedule, hold team calls during the overlapping time between the morning and afternoon shifts.- Stagger VA shifts in order to cover all 7 days of the week.- Instead of spending money on facebook ads that advertise to everyone, match your mailer list to facebook profiles and only target those people. Also, don’t run “get your cash offer now” ads. Instead, explain what you’re offering. - Utilize all forms of marketing. Each seller will have their own personal preference for how they want to interact with your company. - The key to success is sticking to a consistent schedule. Most land investors fall into the trap of sending a mailer, getting tied up with processing those deals, without replenishing the pipeline to get more deals.
Whitney is founder and CEO of Life Bridge Capital, a multifamily syndication investment company that donates 50% of its profits to help families adopt children. Since starting, they have invested over $150 million across more than 900 doors. Whitney is also host of The Real Estate Syndication Show podcast.$100m in 2020From Whitney:Whitney Sewell is a seasoned real estate investor, podcast host, philanthropist and founder of Life Bridge Capital.  Whitney has acquired 900 doors and $150 million in assets under management, and interviewed over 1000 experts on The Real Estate Syndication Show. Whitney was able to scale his business at a groundbreaking pace - starting from nothing in 2017 to now consistently raising over $10 million in a few hours.Episode Highlights:- Networking is key when starting out so that you can connect with people that are running the right programming and can bring you to the next level you’re trying to get to.- Always have an advisor / mentor on your first few deals (especially your first deal) to help identify risk factors that you may be blind to such as overly trusting the seller, broker, or anyone else during your due diligence stage.- As you scale your business by adding more properties to your portfolio, you also need to scale your team.- Although acquisition fees and asset management fees can range from 2% to 4%, these fees are important in covering a large amount of costs that go into setting up legal entities. - Every property that Whitney invests in has an expense cash reserve of at least 6 to 9 months.- As a passive investor considering investing in a deal, one of the first things that’s extremely important to ask is when the first distributions will be made. It is crucial to understand the general partner’s business model for the deal. If the sponsor can’t clearly answer questions on this topic, then the business plan may not hold water and you might need to consider investing in a different deal with a different sponsor.- Dual class structures split limited partner shares into class A and class B, where class A get a preferred 10% return for example, but no upside in the equity when the asset is sold, while class B receives a 7% to 8% preferred return, and receives 70% of the equity upside at the end of the deal.- One way to increase the value of a multifamily property beyond increasing rents and decreasing expenses is being creative like charging for pet fees, covered parking, and dedicated parking spots.Helpful Links:https://lifebridgecapital.com/Best Way to Contact Whitney:whitney@lifebridgecapital.comText Whitney at the number he gives out toward the end of the episode or email him or Mason asking for it.
Stephen is a Marine Corps veteran with a deep background in real estate sales, flipping, property management, and building business credit. He’s director of business development at Credit Suite, Inc., author of Business Credit - The complete Step-by-Step Guide and is an expert in teaching business how to build credit and obtain loans not tied to your social security number.Helpful Links:creditsuite.com/reportsEpisode Highlights:- Most companies you transact do not report to the credit rating agencies unless you specifically ask them.- Business credit can be a powerful tool to unlock hundreds of thousands of dollars of non-recourse debt that’s not tied to your social security number.- Experian business, Equifax business, and Dun & Bradstreet are the 3 primary business credit reporters.- Most business credit cards marketed as business cards, are actually directly tied to your personal credit score, being no different from a personal, non-business credit card (i.e., it doesn’t build your business’s credit score).- It is often possible to go from a credit limit of $1,000 to as high as $250,000 within one yearBest Ways to Contact Stephen:stephen@creditsuite.cominfo@creditsuite.com
Christina Walls is an active land investor and coach for Jack Bosch’s Land Profit Generator program. She grew up in a single parent home as the youngest of four kids in a farming community. As an adult and a mother, she worked regular jobs and then started a cleaning business so she could support her son. She later joined her local REIA where she took a local class on land flipping with Jack Bosch. After dividing into Jack’s Land Profit Generator Program, she completed her first deal and made $8,000. In this episode we go into detail about how she continues to grow and scale her land investing business.Helpful Links and Ways to Contact Christina:www.landflippingfun.comwww.facebook.com/christinachris.daviswallswww.linkedin.com/in/christina-walls-46349b150clwalls71@gmail.comKey Takeaways:- Joining your local REIA (Real Estate Investing Association) can be helpful if you don’t know where to get started- Land investing allows you to do it remotely, from anywhere, and doesn’t have the obstacles that come with houses - The Land Profit Generator consists of 2 tiers, 1 being a series of step-by-step videos, about 45 minutes each. The other is one-on-one coaching.- One-on-one coaching is key to overcoming mental obstacles and serves as an important catalyst to growing your real estate investing business.- The programming of your mind is even more important than money. You can’t make 7 figures if you’re operating on a 6 figure mind set.- Surrounding yourself with a new group of people that are operating at the level you want to get to is extremely important to reprogramming your mind and staying motivated.- The best time to start hiring virtual assistants (VAs) for your business is when you’re encountering time sucking activities that prevent you from closing more deals.- When hiring a VA, list out all of the tasks that you want to do and all of the tasks you want them to do. That way it is super clear how each VA will help grow and scale your business.- Consider having a personal assistant that’s local and can help you with running errands and other physical tasks that overseas VAs can’t do.- Segregating your workflow into batches can help stay on top of things. For example, one week send out your mailers, the next week do property due diligence on all leads, the next week make offers on all of the leads, repeat process.- Always set annual and quarterly goals and break those down to weekly and daily goals.Then reassess at the end of each month and quarter to measure your progress toward your business goals.- When raising capital, never ask for money. If you say you need money to do deals then you look desperate and will not secure any funding.- You can add value to land in a number of ways. It can be as simple as clearing it and adding a fence, or splitting into smaller lots, or splitting into smaller lots and adding modular homes or converting it to an RV park.
Episode Title:#26 Scaling Your REI Business with RE Development with Ken Van LiewIntro:Ken Van Liew is an author, educator, engineer, real estate coach, and one of Manhattan's most successful skyscraper experts. He has earned international praise for his work in the building trades and has overseen the investment, finance, and development of numerous residential, commercial and retail projects.Ken has managed syndicated more than $1.3 billion in capital investments, including 1,500 luxury high-rise residential units, a 3 million-square-foot commercial office and residential quick turn, and a fix and flip system that has completed over 3,000 transactions.He is the author of the book Modern Wealth Building Formula: How to Master Real Estate Investing, and creator of the Modern Wealth Building Formula, which has empowered thousands of real estate investors over the past 20 years.Helpful Links:https://kenvanliew.com/https://globalrestrategies.com/Best Ways to Contact Ken:https://kenvanliew.com/connect/Episode Highlights:- Taking land through the entitlement process can increase land value 10x.- Before buying the land, you can structure the deal where it’s contingent upon approval of the entitlement proposed to the local authorities.- It’s not labor intensive to take land through the entitlement process once you put together a team with an architect, civil and mechanical engineers, and other local professionals that are local and understand existing zoning and variances.- The entitlement process can often take 12 to 18 months or more so you should plan on at least a 24 month runway. Anytime you’re dealing with a department of environmental protection the process can be prolonged.- Some of the key components that goes into your development plan will include a development budget, snapshot at stabilization, cash flow, site logistics plan, project schedule, and bank package presentation. Ken’s consulting company Global Real Estate Strategies can help with all of  these items.- Feasibility studies and market comparisons to determine benefits of the project are key in every deal.
Chris Miles is founder of Money Ripples, a company that has taught real estate investors how to increase their cash flow by over $250m over the last 11 years to reach financial freedom. He’s also the host of the Chris Miles Money Show podcast.Helpful Links:https://moneyripples.com/https://podcasts.apple.com/us/podcast/the-chris-miles-money-show/id895555599Episode Highlights:-Bank on cash flow, not appreciation- The more income streams you have, the more financially stable you’ll be- Hiring a traditional financial advisor is like the blind leading the blind. If they’re not financially free themselves, then  they can’t possibly advise you on how to achieve financial freedom- You can’t retire on mutual funds. Roth IRAs, 401ks, and IRAs are designed to keep the poor and middle class poor- If you’re looking for turnkey single-family rentals that provide significant cash flow, you should join a mastermind group that specializes in single-family properties. It is then your responsibility to vet the people you’re working with. - Chris maintains a network of multiple turnkey single-family operators that will not only sell him the property but also manage it for him. By having multiple relationships, he is able to pick the best deals that provide the strongest cash flow.
David is founder of the land investing company Easy Land Investing and actively teaches new land investors how to invest in vacant land in conjunction with Jack Bosch’s land profit generator program. In this episode we cover key topics regarding what it takes to be a successful land investor and what you need to grow and scale your business.Helpful Linkshttps://easylandinvesting.com/Land Profit Generator: https://www.landprofitgenerator.com/landflippingtraining/?amp=&fbclid=IwAR24xR9Lq35IO-nXd3UJHnsHK10MUlosJzkLsis1wUeZv5UZxiaCljRbSpg&opid=68/&orid=214006Best Way to Contact Davidhttps://www.facebook.com/david.vanginhoven.39David is live on Clubhouse every Thursday at 4:00pm CST. Follow him on Clubhouse and message him on Facebook for more details.Episode Highlights- Neutral letters (without an offer) can be a useful tool in creating a wide funnel- Don’t try to make $1 million on your first few deals. Do smaller deals to get reps in, build your confidence, and develop systems for your business.- Your virtual assistant (VA) doesn’t have to be perfect. If she or he is even just 80% accurate then you’ll be a millionnaire.- Decide how much money you want to make and reverse engineer your market and number of property owners you mail to determine how how many pieces of mail to send.- There’s over 60,000 registered real estate agents in the Dallas, TX market alone, which is one of many reasons wy investing in vacant land is far superior.- When posting on Facebook Marketplace or running ads, you cannot include images of animals, weapons or even things considered to be a weapon such as a shovel. If you do, the Facebook algorithm will block your ad/- Simply boosting a listing is a legal way for Facebook to steal your money. It is not targeted at all, and shows your ad randomly to people that may not be in the market for buying land.
Tim is the co-founder & CEO of StackSource. He identified the market opportunity for a tech-enabled commercial real estate financing platform, recruited Nathan as a co-founder, and built the company. Prior to StackSource, Tim worked for tech giants Facebook and Google where he helped expand B2B marketplaces in ad tech. Helpful Links:https://www.stacksource.com/https://wefunder.com/StackSourceEpisode Highlights:- Once you set up your profile on Stacksource, multiple banks can give you instant quotes. This saves you days and weeks of shopping around quotes on your own.- Stacksource partners you with a capital advisor to help you negotiate loan terms to ensure you’re getting the best deal.- Approximately half of the loan volume on StackSource.com is for multifamily properties. However there is also self-storage, office, industrial, and other property types.- Most lenders on StackSource are banks or credit unions, which usually take 45 days or longer to close. However, there are also private lenders on StackSource that can close in as little as 2 weeks depending on your deal and experience level.- Typically on vacant land deals, lenders require you to invest a higher amount of equity (~50% or lower LTV) to mitigate the risk of the lender being stuck with a property that doesn’t generate cash flow.- When first starting out on your first commercial deal that requires financing, it is highly recommended that you partner with a more experienced real estate investor to increase the likelihood of your lender approving your loan, as well as to negotiate the best terms on both the financing and purchase of the property.- With StackSource you’ll be able to close on your deals more quickly, allowing you to maximize the number of deals you do.- Go to https://wefunder.com/StackSource to invest equity directly into StackSource.
Adam is founder of Strata SFR, a platform that connects developers and builders of single family residential homes to active SFR Investment funds. Prior to launching Strata SFR Adam co-founded and ran an online single family rental marketplace called OwnAmerica. With over a decade of experience, Adam has transacted on more Single-Family Rental Portfolios than any single broker in the industry. Best way to contact Adamastern@stratasfr.com914-906-5847
Trevor is the founder of podcastingyou.com, a company that helps real estate investors raise capital by speaking on well-known podcasts. Key TakeawaysResearch other podcasts on ListenNotes.comIt usually takes 5 to 10 podcast episodes to get comfortable sharing your story so Trevor recommends starting with smaller podcasts first to work out the kinks before speaking on larger, more well-known podcasts.A handful of podcasts charge for you to speak on the podcast, but most (~99%) do not.Trevor recommends having several deals under your belt first and have invested in real estate for at least 2 to 5 years before speaking on other podcasts to raise capital.Always build your email list so that you can always remain in control of your assets. If all of the data is on a platform like Facebook, you’re always going to be at risk of your account being banned for some terms of service violation and losing access to your data.Most investors speak on 1 to 2 podcast episodes per week over 3 to 5 months. However, it is recommended that you continue doing so as long as you’re in business to prevent your traffic from drying up.Going forward, it is likely that there will be fewer podcasts out there, but of the ones that remain, they will be generating more high quality, consistent content. Other podcasts will fall by the wayside. Generally a podcast needs to have at least 50 episodes to gain solid traction and should be releasing episodes on a consistent schedule of at least weekly.In addition to speaking on podcasts, Clubhouse, TikTok, and Youtube are also great platforms to use to get in front of your audience.Best Ways to Contact Trevortrevor@podcastingyou.comhttps://podcastingyou.com/
Join me as I speak with Daniel Martinez and Anthony Gaona, founders of HivemindCRM, which is a hybrid mastermind and CRM software package that enables you to exponentially grow and scale your real estate investing businessHelpful Links:Sign up for Hivemind: https://bit.ly/2POzYUzHivemindCRM Free Facebook Group: https://www.facebook.com/groups/137799891494707/Episode Highlights:- If you’re stuck in a rut or low point in your business, the best thing you can do is increase your marketing. If you do enough marketing you will eventually trip over a deal.  You can also partner with other more experienced real estate investors that allows you to fill in the gaps to make up for any weak areas you have. For example, you might be good at finding sellers, while your partner might be best at finding buyers on the disposition side of your business.- The cost of marketing goes down significantly the more you expand your market size.- Often you can find cheaper leads in a shorter amount of time by using Facebook ads and PPC campaigns versus conventional methods such as sending out snail mail to property owners.- To execute “free” real estate strategies, the goal is to have $0 out of pocket. To do this, it’s best to understand the needs of the seller and why they want to sell. 
Join us as we speak with Paul Moore, founder of Wellings Capital. After starting his career at Ford Motor Company, Paul went on to co-found a staffing firm that he later sold, and then got involved in real estate. After investing in single families he progressed to multi-family properties, and then evolved to self-storage and mobile home parks.Episode Highlights: - Delaware Statutory Trusts (DSTs) are an excellent place to put your 1031 exchange sale proceeds to defer capital gains tax- Most DSTs are available through broker/dealers who charge a commission of 6%- With a 1031 exchange you must identify 3 properties within 45 days of selling your property, then must close within six months after selling your property. However, the problem is that most deals will be gone in less than 45 days. Delaware Statutory Trusts solve this problem.- Properties in DSTs are typically stabilized with no value add component, which results in safer, albeit, lower returns. Properties in DSTs often use triple net leases to push property maintenance expenses onto the tenants.- On a DST deal, the GP typically receives a 1% liquidation fee, an up-front fee of 2%, and an on-going property management fee of 1% to 2%. Also, depending on the trust documents, the GP is usually allowed to keep the excess return over 6%, called the “scrape”- A typical DST deal is $20 million to $100 million so fees for the GP can be much more meaningful than deals smaller than thatBest Way to Contact Paul:https://www.wellingscapital.com/Helpful Links:https://www.realized1031.com/
Description:Tune in to learn about Lane Kawakoa’s experience purchasing more than 4,200 multifamily units valued at more than $460 million. Lane is also the host of the Simple Passive Cash Flow Podcast and founder of Crowdfund Aloha.com and REI Aloha.com.In his prior day job, Lane managed over $250 million of construction projects.Episode Highlights:- After you master your core business it’s wise to start diversifying into other complementary asset classes such as real estate development- Real estate development in some cases can be cheaper than buying an existing building that’s often at least 20 to 30 years old. The biggest downside of doing a ground-up build is that you don’t have any historical financials to rely on - Depending on your financial situation, it might make sense to continue renting your primary residence and use that lump sum of cash required for a down payment ot instead invest in single family rental properties or syndication deals as a passive investor- To reverse the traditional pyramid of investing, invest in cash flowing prudent investments that build the base of your pyramid and do not invest in growth stocks that conventional financial advice suggests- 1031 exchanges are not actually the valuable tool they are typically touted to be. It’s usually more efficient to use capital losses and depreciation to offset the capital gains realized on the sale of the asset to avoid accruing an increasingly larger tax liability that can only be avoided at the time of your death- When vetting a syndication deal to invest in as a passive investor, focus at least 50% on the numbers and 50% on the sponsor. Some key red flags to be aware of are annual rent increases of more than 3% and thin cash reserves Helpful Links:https://simplepassivecashflow.com/https://crowdfundaloha.com/https://reialoha.com/Best Way to Contact Lane Kawaoka:lane@simplepassivecashflow.com
Join us as we speak with Chris Sands, found of Sands Investment Group, a commercial real estate broker specializing in retail, convenience stores, office, and other commercial properties.Helpful Linkshttps://signnn.com/https://signnn.com/associates/chris-sands/Episode HighlightsA triple net lease (NNN Lease) is one in which the tenant agrees to pay for all expenses, including property taxes, utilities, and common area maintenance. While common for retail properties, Chris said he has seen an increasing trend of these leases across other property types as well. Each broker at Sands makes 400 to 500 calls per week (about 100 calls per day) to source deals. They also specialize in specific property types such as gas stations or fast food restaurants.Depending on the property and the market, Chris and his team typically sell properties at a cap rate of 4% to 8%.The cap rate is also affected by who is backing the lease. For example, although Chick-fil-a restaurants are sometimes sold to franchisees, the lease is still backed by the corporate Chick-fil-a balance sheet, which results in a lower cap rate (i.e., higher sales price) than would a different franchise restaurant backed by the individual franchisee.
Join us as Kevin and I discuss the nuances of investing in parking lots and mobile home parks, as well as investing in syndication deals as a passive investor, and what to look out for when hiring a third-party property manager. Kevin is the Founder & CEO of Sunrise Capital Investors, which has a long track record of investing in mobile home parks, parking lots, apartments, offices, and single family homes across the US. He’s also the host of the Mobile Home Academy podcast and the highly rated Real Estate Investing for Cash Flow Podcast.Helpful Links:https://sunrisecapitalinvestors.com/https://www.kevinbupp.com/Episode Highlights:The parking lot industry is highly fragmented, run by a lot of mom and pop operators. Because of this, a lot of them are run using cash, which opens up a pandora’s box of employee theft.When Kevin hired third-party property managers interests were not aligned. The property managers were not profit driven and often went over budget on things. Kevin and his team ultimately determined that it was best to bring the property management aspect of their business in house so that they could ensure that they can continue to provide reliable, consistent returns to their investors.Sometimes mobile home parks are only licensed for a portion of the total lots that they are selling you. Always check with the city and county to determine the number of lots that are currently permitted.The underwriting for a deal is an imperfect process and always a best guess. If the asset is good and located in a good market, then it really comes down to the sponsor’s ability to execute the business plan. When considering investing in deals as a passive investor (LP) you need to first look at the sponsor’s track record. How long has she/he been doing it? How many properties have they taken full cycle from acquisition to disposition? What does their personal balance sheet look like (i.e., do they have any personal assets to go after if the deal blows up)? What is the experience other investors have had that have been investing with the sponsor for several years already?
Jeff Holzmann is CEO of IRM, a company formed solely to acquire and wind down nearly $2.0 billion in real estate assets invested through the now defunct crowdfunding platform RealtyShares. After the failure of RealtyShares, IRM struck a deal to take over their portfolio and has been able to fix many deals, provide clear and accurate communications to thousands of investors that were left in the dark when RealtyShares ceased operations.  In this episode we go in depth on what happens when you invest with a bad sponsor, and the not so sexy reality of operating assets after they’re acquired, even if they’re not making any money.Helpful Links:https://www.iintoo.com/https://rreaf.com/team-collection/jeff-holzmanEpisode Highlights:Two of the biggest risks with investing in syndications is (1) execution risk and (2) how the deal is structured. From an execution standpoint, the sponsor may lack experience and a successful track record. While she or he might have had success using their own money on a smaller scale, when tasked with deploying millions of dollars into the same asset class it often requires an entirely different business plan.  For how the deal is structured, do not invest in second lien debt. If the deal goes sideways and the sponsor loses interest because they’re not making any money on the deal, the first lien debtholders will begin to foreclose and the second lien debt (and equity) will be severely impaired and out of the money.A lot of risks associated with syndications can be effectively mitigated with the right sponsor. Speak with investors that have been investing with the sponsor for multiple years. Look at the results of properties that the sponsor has completed full cycle. You also need to understand if the syndicator is a professional operator with a validated, tested business plan and a lot of experience, and not going to simply apply a “mom and pop” approach and hope for the best. You should also consider the net worth of the sponsor. If the sponsor doesn’t have any assets, then there won’t be anything to collect if they are sued for doing a poor job on a bad deal.IRM categorizes their deals into 3 tiers with tier 1 being the best and tier 3 being the worst. Approximately 50% of the total deals are tier 1, while 25% are tier 2 and the remaining 25% tier 3. The tier 3 deals are often single family sponsors that were not able to effectively scale their business or execute their business plan.Before suing the sponsor for losing investors’ money, IRM must balance that with the cost to litigate. Even if you win a lawsuit, you may still lose in the end if the defendant doesn’t have any value for you to collect. Best way to contact your host, Mason Klement:mason@masonklement.comhttps://www.masonklement.com/Be sure not to miss any future episodes by subscribing to the Scalable Real Estate Investing Podcast using the links below.YouTube channel: https://www.youtube.com/channel/UCgDaSaSQP0KLoVCgydDd9HwBuzzsprout: https://www.buzzsprout.com/1131344 
loading
Comments 
Download from Google Play
Download from App Store